AGENDA ITEM: A4
MEETING:
RSSB Board Meeting
DATE:
08 January 2015
SUBJECT:
Supplier Assurance
SPONSOR:
Chris Fenton
AUTHORS:
John Abbott and Brian Evans
1.
Purpose
1.1
To seek board support for the development of more effective supplier
assurance arrangements for the GB rail system (including TfL), which builds on
recent activity to deliver basic improvements. Implementation of the proposed
strategy has the potential to deliver significant benefits to clients, suppliers and
the rail system as a whole by making a contribution to cost efficiency and safety
improvement.
2.
Why is supplier assurance important?
2.1
It underpins every organisation’s Safety Management System (SMS) and
provides the confidence in the products and services that are procured. Over
the last 20 years since rail privatisation, a variety of different supplier assurance
schemes and arrangements have been developed by different organisations
across GB rail, largely driven by duty holders’ needs to have some form of
assurance mechanism in the new contracting environment. LUL and TfL have
also developed their own separate arrangements.
2.1.2
This has led to confusion and a considerable degree of frustration in both the
buyer and supplier communities with often duplicative information being sought
from suppliers and repetitive audits of the same suppliers, many of which were
determined and undertaken on a commercial basis, rather than one based on
risk and performance.
Research undertaken with the board’s approval identified that this approach and
the sum of all third party and in-house industry arrangements, was costing
industry in the order of over £100m per annum and consuming 1,000 person
years of effort.
2.2
Following a review by RSSB, the board has sanctioned a number of actions
which have delivered the following improvements:
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A guidance document to define the role and purpose of existing
schemes and arrangements has been published to improve stakeholder
understanding.
A single industry catalogue has been developed to describe the full
range of products and services procured by GB rail. This is a necessary
enabler for future developments.
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3.
Control over the registration and qualification of suppliers, together with
ownership of IPR and supplier data has been transferred back to industry
ownership from third party commercial interests, with the RISQS board
established to provide governance.
Some limited recognition of other schemes and relevant third party
certification has reduced the number of audits and associated costs.
Operational control links established between Network Rail’s ‘Sentinel’
scheme and RISQS, with a staged migration of a number of ‘On Track
Plant’ (OTP) requirements to RISAS planned.
Some efficiency improvements have been delivered to RISQS, including
the rationalisation of supplier qualification information requirements and a
streamlining to the scope and depth of audits, underpinned by a new IT
platform.
The scope of critical commodities covered by the RISAS scheme is
increasing.
A new Rail Industry Standard (RIS) to define future supplier assurance
requirements for industry is being drafted, to update and replace the
current Group Standard, GM/RT/2450 and ATOC’s ACOP 1003
standard.
All of these developments are compatible with International Standards for
Accreditation and Conformance Certification.
The board approved the appointment of a RISQS scheme manager
earlier in 2014, to be funded from the proceeds of the scheme. However,
this appointment was not progressed until the formal contract between
RSSB and Achilles, the current service provider, had been negotiated
and signed. This new contract has now been signed and the appointment
is being progressed with the RISQS board and will be an important
management resource to support the future developments outlined in this
paper.
The newly signed contract runs until April 2017 thereby creating a
“window of opportunity” in which the RISQS and RISAS boards wish to
work together to deliver the strategic approach outlined in section 4.
Characteristics of GB rail’s supply chain
3.1
GB rail’s supply chain is both national and international, comprising some 250
buyers procuring from a common supplier base numbering in excess of 3,000
companies, whilst some suppliers to industry are of course also buyers in their
own right too. However, whilst to a large degree they are trading in this shared
commercial environment, they still tend do their own thing in the absence of a
common strategy, leading to overlap and duplication.
3.2
The importance of effective supplier assurance is also being increasingly
recognised by other sectors and the BSI published ‘PAS 7000’ in October 2014.
This is a universally applicable supply chain information standard for use by
suppliers and buyers at organisations of all sizes across the globe, enabling
alignments of supply chains and control of risk by adopting an internationally
defined framework of good practice for supplier assurance.
3.3
We are not unique and from working to understand other sectors’ approach to
assurance of suppliers, including nuclear, oil and gas and construction, they too
are facing similar challenges to GB rail and have developed, or are trying to bring
about similar solutions and therefore there is opportunity and benefit in a
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collaborative approach being taken to address these challenges and this is being
progressed.
4.
Proposed strategic direction
4.1
The RISQS and RISAS boards have agreed to work together to develop and
implement the following framework for future supplier assurance across GB rail:
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4.2
This will also secure the following benefits:
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4.3
A single supplier assurance governance body, to be formed by the
merging of the RISQS and RISAS boards.
Unified supplier assurance and management arrangements for GB
rail, where the key stakeholders define the capability and competence
standards for suppliers of goods and services.
Risk based assurance arrangements, defined for every commodity
procured thereby creating clarity amongst the buyer and supplier
communities as to what level of assurance is relevant and required.
Core information about each supplier collected ‘once’, minimising
duplication and reducing costs.
Monitored supplier performance and feedback processes in place to
improve outcomes and develop mutually beneficial trading
partnerships, thus encouraging continuous improvement by suppliers
and enabling greater innovation.
Supplier assurance co-ordinators, nominated by the buyer and
supplier communities to ensure alignment of interests and objectives.
A single central repository of information established for all
stakeholders to access the information they need.
Easier entry for suppliers new to the GB rail sector.
A reduction in total costs.
A single GB rail entry point for suppliers.
Simplification of processes
Elimination of duplication.
Easier to trade with GB rail for new suppliers, including SMEs.
Benchmarking of supplier performance.
Enabler of product and service quality improvement.
The next steps, subject to the board’s support for the strategic direction
proposed, is for the RISQS and RISAS boards to develop a joint plan, together
with an assessment of the resources required and the associated costs. In
addition to the strong support from the RISQS and RISAS boards, ATOC
(through its ‘Supply Chain Forum’) and RIA are also supportive of the approach.
They have recently undertaken a joint study into how to encourage supply chain
excellence, which is highly relevant to this proposal. The support of the RDG and
RSG will also need to be secured and is regarded as vital in order that the plan is
championed at the highest levels in the industry. Assuming the board support the
proposal, the strategy will also form one component of the proposed industry
safety strategy.
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5.
Recommendations
5.1
The board is asked to:
NOTE the current status of supplier assurance in GB rail and APPROVE the
direction jointly proposed by the RISQS and RISAS Boards.
NOTE that if not supported, the RISQS and RISAS boards will carry on operating
the existing schemes and replace them with updated, but functionally similar
arrangements in 2017.
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